NITV answers to questions on notice from Senator Hon. Judith Troeth Re Senate Environment, Communications and Arts Committee Inquiry Broadcasting Legislation Amendment (Digital Television) Bill 2010 Response to question taken on notice verbally Q: Senator Troeth (p7) “…in the expectation of being able to continue as you have gone on, you would have explored funding options and also the sort of programming that you were going to deliver. For instance, could you give us your funding commitment for the next two or three years, for the next cycle?” A: With respect to NITV’s future funding, it is the case that Minister Garrett in conjunction with Ministers Conroy and Macklin, announced on 15 April , 2010 that the Government would fund NITV for one year, 2010-11 with the sum of $15.2 million. However, in our Submission lodged in February 2010 to the Department of Environment, Water, Heritage and the Arts (DEWHA), NITV presented an evidence-based case for funding over five years as follows: Year 1 Year 2 Year 3 Year 4 Year 5 $m $m $m $m $m TOTAL 25.8 28.4 31.1 32.2 33.2 Our core activity is providing a national service on television and via digital media to a national audience. With Aboriginal and Torres Strait Islander people as our core audience NITV showcases, celebrates, informs and educates the wider community to the diversity and richness of Aboriginal and Torres Strait Islander people and culture and highlights those issues most affecting First Australians from an independent, Indigenous perspective. Maintenance of strong Indigenous editorial and commercial control underpins our activities. The existing Funding Agreement between NITV and DEWHA is for $48.5 million across 4 years from 1 July 2006 to 30 June 2010. During the first year, 2006-07, the NITV steering committee worked to deliver the constitution and business plan. The company was formed in December 2006 and staff were engaged progressively from March 2007. NITV first went to air via the Optus Aurora platform on 13 July 2007. Our first operational year, 2007-08 was occupied predominantly with setting up the service, purchasing previously existing content and commissioning a limited range of new productions. The peak year for full operations, including commissioning across a wide genre spread, and establishing NITV National News was 2008-09. As our benchmark year, NITV expended approximately $21.5 m. The vast majority of those funds were expended in commissioning new content primarily from the independent Indigenous production sector. Doc Ref: NITV QoN AAnswers SECA COMMITTEE 221004 fin.doc Page 1 of 14 f Television is often called a ‘hungry beast’. Providing a 24 a day, 7 day a week programming schedule, as NITV does to more than 8 million Australians, requires a large and continuous supply of suitable content. Given that there has only ever been a limited number of programs made for, by or about Aboriginal and Torres Strait Islander people, NITV cannot rely on existing content in any significant volume. Therefore our primary objective has, and must continue to be, on the commissioning of original productions as well as the maintenance of stakeholder relationship, especially our viewing audience. NITV must point out that single year funding negatively impacts upon development, production and delivery of new content and the costs associated with management and transmission of that content. The nature of television production requires lead time to enable producers to develop, produce and new products. Lead time typically varies by genre. Drama production, for example, requires in excess of twelve months from inception to commencement of production. Other factual programming, including documentary can call upon similar lead times. In many cases, productions fall across financial years. Consider, for example, the production of our footy show – ‘Marngrook AFL’ and ‘Barefoot Rugby League’. In both cases the football season commences around March and concludes in October. To commission a series to cover the 2011 full football season means having to forward commit funds beyond 30 June 2011. Being unable to forward contract means having to commission a series from March until June, and then commission, separately, July to October. NITV and its producers therefore will increase costs, such as in legal and business affairs, amongst many other cost factors. Most profoundly, one year funding impedes growth of independent production enterprises and diminishes continuity of employment and skills growth. NITV also notes that one year funding impacts upon costs associated with transmission, infrastructure and indirect costs. In most cases being unable to enter into multi-year agreements diminishes cost efficiency due to supplier amortisation. Be it in provision of data, ISP and telephony, or in delivery of transmission services, or in insurances, leasing of premises, etc., one year agreements are much less cost efficient than those spread across multiple financial years. In relation to transmission of the NITV service, our funding request included costs associated with continuation of existing transmission services but excludes any additional costs associated with the VAST platform or any other digital terrestrial transmission. Senators may also wish to note that the primary NITV carriage on the Optus Aurora DTH satellite service and subsequent retransmission via analogue UHF in RIBS communities is undertaken via Imparja. Imparja receives from DEWHA $2 million annually of which $820,000 underwrites the costs of carriage. Doc Ref: NITV QoN AAnswers SECA COMMITTEE 221004 fin.doc Page 2 of 14 f Therefore NITV will continue to rely on additional indirect funding in 2010-11 to continue carriage on the Aurora platform via Imparja in addition to the direct funding of $15.2 million as announced. Currently NITV is available Free-to-air: • Direct to home satellite via the Optus Aurora platform, non-encrypted with no conditional access (which means if you have a satellite dish and receiver anywhere in the country, you can watch NITV); • retransmission via the 148 RIBS/BRACS sites in remote communities analogue UHF; • Alice Springs, Mount Isa and Bourke via analogue UHF; • Sydney on the Broadcast Australia trial service on digital channel 40; • Parliament House, Canberra on the in-house reticulation service; NITV is available via subscription TV. In each case, NITV is part of the ‘base tier’ subscription which means that you don’t pay any extra to get NITV if you already get pay TV. NITV appears on: • Foxtel cable and satellite; • Austar satellite; • Optus Vision cable; • Neighbourhood Cable in Mildura, Ballarat and Geelong; • TransACT cable in the Canberra and Queanbeyan; • Austar for Schools Package – a free television and internet resource offered to schools within the AUSTAR satellite coverage area. As noted above, NITV is carried free to air via terrestrial analogue UHF in three locations, Alice Springs, Mount Isa and Bourke. These sites are managed via Imparja. NITV incurs annual charges of approximately $53,000 for the operational costs (primarily power) for these sites. These costs are paid to Imparja and are not covered within the $820,000 they receive direct from DEWHA. The NITV Board had originally agreed to cover these costs only for a single year, 2008. However, we have continued to pay these charges until the end of the current funding agreement with a view to reviewing in the near future. Our submission to DEWHA for 2010-2015 did not include these costs. NITV notes that the service is available on digital terrestrial in the Sydney metropolitan area via the Broadcast Australia (BA) trial datacasting service. However, as a result of the ACMA decision to cease the trial, NITV along with a range of other services including Parliamentary television, will cease at midnight 30 April, 2010. This is a matter of grave concern to NITV as the Sydney metropolitan area represents the single largest concentration of Aboriginal and Torres Strait Islander people in Australia. NITV has recently written to Minister Garrett, and copied Minister Conroy, with a proposal to deliver our service via digital terrestrial in the five capital cities via multiplexing with Community TV transmitters. Doc Ref: NITV QoN AAnswers SECA COMMITTEE 221004 fin.doc Page 3 of 14 f Based on commercial in confidence information, we can divulge that this opportunity delivers NITV free to air digital terrestrial in those centres, representing approximately 70% of the Australian free-to-air audience at a cost of approximately only 8 cents per viewer per year. NITV also notes with some concern, that there is little likelihood of anyone utilising the existing datacasting spectrum until the conclusion of the digital switch-over and spectrum restacking. We have asked Minister Conroy consider allowing continuation of the trial service to ensure until such time as a more sustainable alternative, such as our CTV multiplexing option, is fully considered. We are currently awaiting response from the relevant Ministers in relation to our proposals. NITV wishes to note that a submission entitled “NITV transfer to Digital Terrestrial” was lodged with the Department of Communications, Broadband and the Digital Economy on 26 October 2009, which in summary outlined NITV’s strategy for digital terrestrial transmission. NITV Responses to written questions taken on notice. Q.1 Are you aware whether the Government’s proposed conversion of 100 self-help retransmission sites are likely to be in areas where NITV is currently broadcast via analog terrestrial means? A.1 First in order to answer the question accurately, let NITV correct some recent information released outlining where NITV is broadcast terrestrially in free to air form. Contrary to the government press release of 16 April relating to NITV funding in 2010 / 2011, NITV is transmitted in terrestrial analog form in 147 remote indigenous communities of which 71 are so called RIBS communities and 76 are so called BRACS communities (the acronyms are historical and have no meaning of significance to the Senate Committee or this answer).